Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

3 Reasons to Buy Tata Motors Today

Innovations and acquisitions are preparing this Indian auto manufacturer for a profit-filled future.

Tata Motors (NYSE: TTM) became an overnight automotive celebrity in 2008 when it created the world's cheapest car, the Tata Nano. Since then, Tata Motors has been known as "that Indian auto company that makes that super-cheap car." But there are a whole lot of reasons (in a whole lot of sizes) to give this company more than a nanosecond of your time.

In the beginningNicknamed the "People's Car," Tata's Nano hit the road in 2009 with a price tag of $2,500. As a cost comparison, Ford's ultra-affordable Model T from 1909 would cost $22,000 if it were to roll off production lines today. The Nano suffered from a slow start, taking more than a year and a half for total sales to top 100,000 units. But fiscal year 2011 put 64,000 new owners behind the wheel, and 2012 sales are beating expectations.

The Nano is so cheap that few manufacturers have been willing to gut their margins to try to compete with Tata's pioneer position. Ford(NYSE: F) says the Nano is a no-go -- further evidence that Tata may have created a lucrative competitive moat for itself.

Premium productsIn 2008, Tata Motors bought the floundering Jaguar Land Rover company from Ford for $2.3 billion. Over the past four years, Tata has revitalized both Jaguar and Land Rover into lucrative brands by focusing on quality and emerging-market presence. In fiscal year 2011, Jaguar Land Rover accounted for 57% of Tata's total automotive revenue, and the trend seems to keep accelerating. Jaguar's XF is its best-selling model ever and has more than 80 awards to its name, putting Jaguar back in the spotlight as a competitive luxury car. Land Rover increased vehicles sold by nearly 60% in the past three years, thanks in large part to booming markets in Russia and China.

Unlike the Nano, Jaguar Land Rover will face increased competition in the years to come from the likes of Volkswagen's (NasdaqOTH: VLKAY.PK) Audi and Toyota's (NYSE: TM) Lexus. Both of these companies are expanding into emerging markets, where premium car and SUV sales continue to speed up.

One truck, two truck, light truck, new truckFrom environmentalists to investors, the one statistic that has everyone's ears perked is the incredible increase in vehicle ownership that will accompany the rise of the developing world's middle class. However, while other car companies are clambering over each other to offer the best mid-level sedan for the global middle class, Tata has been busy filling a complementary niche: small trucks.

Already the world's fourth-largest truck manufacturer in the eight-ton-plus category, Tata Motors has been working for nearly a decade to expand its light-truck business. A joint venture with Cummins(NYSE: CMI) should help ensure excellent diesel engine technology for its fleet. In 2004, Tata headed to South Korea by acquiring the country's second-largest truck manufacturer, Daewoo Commercial Vehicles Company. In 2006, Tata bought Thailand's Thonburi and its lucrative pickup truck market. In 2010, Tata Motors launched production of its Prima model, the Nano of the trucking world. Light commercial vehicle sales have nearly doubled in the past three years, making this Tata's fastest-growing division.

Source: Author; Tata Motors 20-F.

Source: Tatamotors.com; jaguarusa.com.

Tata goes globalWith total sales volume for all of its vehicles up 24% over the past year, Tata is continuing to expand. The company is an excellent example of a homegrown company making a name for itself in international markets, but American companies are also recognizing the opportunity for global profit. For a limited time, The Motley Fool is offering a special free report outlining "3 American Companies Set to Dominate the World." It's as free as this article, so get yours today!

Fool contributorJustin Loiseauowns neither the stocks nor the vehicles mentioned in this article. You can follow him on Twitter@TMFJLoand on Motley Fool CAPS@TMFJLo.